GST on services supplied by foreign Airline

[Kaustubh Karandikar]

XYZ (Freight Forwarder) taking services of the foreign Airline / Agent for importing the goods of the client in India of XYZ. The amount paid to the foreign Airline / Agent is recovered from the client in India by XYZ with mark up.

1) Is XYZ required to pay GST on the amount recovered from Indian Client with mark up?

2) Is XYZ required to pay GST under reverse charge on the amount paid to the foreign Airline / Agent as per Sr.No.1 of Notification No.10/2017 i.e. Any service supplied by any person who is located in a non-taxable territory to any person other than non-taxable online recipient.? In my view, as per Sr.No.20 of Notification No. 9/2017-Integrated Tax (Rate) dt. 28.06.2017 as amended, Services by way of transportation of goods by an aircraft from a place outside India up to the customs station of clearance in India is exempted. Therefore, answers to both the questions will be ‘NO’. Expert’s views please.

AI Summary

Freight Forwarder XYZ Exempt from GST on Markup and Reverse Charge for Foreign Airline Import Services Under GST Rules. A freight forwarder, referred to as XYZ, inquires about the Goods and Services Tax (GST) implications on services provided by a foreign airline for importing goods into India. Specifically, XYZ seeks clarification on whether they must pay GST on amounts recovered from Indian clients with a markup and whether GST is applicable under reverse charge for payments to the foreign airline. The consensus, supported by an expert, is that due to exemptions for transportation of goods by aircraft from outside India to the customs clearance station, XYZ is not required to pay GST in either scenario.